Investing, For Now, Is About Quality, Not Quantity
If you are positioning yourself for the second half of 2022 and for 2023 we urge quality over quantity. While not all segments and industries are in peril, it is also true that not all companies within well-positioned groups will do well. This means it is more important than ever to be choosey with new investment dollars and that’s why we’ve been screening for names among the Maketbeat.com Top-Rated Dividend Payers list. To make this list the stock must pay at least 2.0% in yield and have the support of the analysts. The stocks that made our screen all carry a 3-star rating which means the bulk of analysts' ratings are a Buy or higher.
Marriot Vacations Worldwide For The Hospitality Rebound
As wickedly unpredictable as the airlines are this year, the hospitality industry is experiencing a strong rebound that has Marriot Vacations Worldwide (NYSE: VAC) set up for dividend growth. The stock is yielding just over 2.0% at this time and the payout ratio is a low 22% of the earnings outlook. In this light, we are expecting to see a larger than usual increase, somewhere in the range of 10% to 15% of the current payout, and it may come before the end of the fiscal year. The company has already raised its dividend once since reinstating post-COVID and the outlook for earnings is robust. The analysts are expecting to see F2022 EPS grow about 15% relative to the pre-pandemic levels and we see upside risk in the outlook.
In regard to the analyst, the five analysts with current ratings have Marriott pegged at a solid Buy with a price target more than 55% above the current price action. The consensus price target is down from a peak set earlier this year but it is firm in the 1 and 12-month comparisons and we think it will trend higher in the wake of the Q2 results. The company is expecting to issue Q2 results at the end of July and should be able to easily top the $1.15 billion analysts' target.
Shell, A Top-Rated Energy Company
Shell PLC (NYSE: SHEL) isn’t the highest-yielding energy stock but it is a very safe payer and one that should benefit from the same macro-trends supporting the energy sector at large; record-high oil prices. The stock yields a low 3.85% on a forward-looking basis compared to above 5% for many others in the industry but this one comes with a high rating as well. The 6 analysts with current ratings have it pegged at a firm Buy with a price target about 35% above the price action. Based on the outlook for earnings and oil prices, we think the company could issue another dividend increase as soon as the current quarter. As it is now, the payout ratio is super low at less than 10% and that figure will likely decline in the wake of the Q2 results which are due out at the end of the month.
Innovative Industrial Properties, An Innovative Play On Cannabis
The Cannabis market is still a tough nut to crack due to the spotty nature of US legalization. If you’re interested in a way to invest in this sector while limiting your risk Innovative Industrial Properties (NASDAQ: IIPR) may be the answer. The company is a triple-net REIT that buys and leases-back cannabis infrastructure ie grow facilities and the like and with little to no costs to itself (other than the initial investment). What this means for investors is a steady stream of cash flow and one that has been growing rapidly as the company deploys its capital. In regards to the dividend and the analysts, the stock is paying a whopping 6.25% dividend and it is rated a solid Buy with a price target more than 100% above the price action.